Miners Buoyant Over Surging Commodity Prices

Indonesian miners have started to get back on their feet following an upward trend in the prices of global commodities.

Official government data shows that as of September, about 60 percent of the Rp 1.28 quadrillion (US$95.16 billion) tax revenue target had been met this year, with the mining sector having posted the highest annual growth of more than 30 percent.

The growth in the mining sector came as a result of an increase in the export of several commodities amid recovering prices. Earlier this year, the government reopened a tap on exports of low-grade nickel ore with content below 1.7 percent and washed bauxite with an aluminum oxide content of 42 percent or more.

State-owned diversified miner PT Aneka Tambang (Antam) is among those who have benefited from the new export policy.

“We were able to book positive results in net revenue as well as in operating profit by the end of the third quarter,” Antam corporate secretary Aprilandi Hidayat Setia told The Jakarta Post on Thursday.

As of September, Antam had exported 1.9 million wet metric tons (wmt) of low-grade nickel ore, about 70.3 percent of the total quota granted by the government in March. In October, it obtained another permit to export 1.25 million wmt of nickel ore.

As a result, Antam’s net revenue climbed by 7.9 percent year-on-year (yoy) to Rp 6.96 trillion in the first nine months. It also recorded Rp 232.89 billion in operating profit, a significant increase over the operating loss of Rp 193.27 billion it booked in the same period last year.

However, Antam still saw a net loss of Rp 331.47 billion at the end of the third quarter, far below last year’s Rp 38.27 billion in net profit.

“The net loss came from a depreciation of our Pomalaa ferronickel plant expansion project in Southeast Sulawesi, which was completed in 2016. We also started paying off debts from the project’s financing,” Aprilandi said, adding that the net loss in the third quarter had fallen 33.2 percent from the previous three months.

Meanwhile, nickel miner PT Vale Indonesia booked a net profit of $1.9 million in the third quarter alone. Even so, its net loss still grew by 179.4 percent to $19.6 million in the first nine months because of huge accumulating losses in the first and second quarters.

From January to September, Vale’s top line jumped by 10.6 percent yoy to $448.7 million as a result of recovering nickel prices. The London Metal Exchange’s nickel cash value reached this year’s peak of $12,140 per metric ton on Sept. 5 before falling to $10,580 per metric ton by the end of the third quarter.

Meanwhile, state-owned tin miner PT Timah recorded Rp 6.6 trillion in revenue, up 44.17 percent yoy in September. Its net profit skyrocketed to Rp 300.57 billion from Rp 50.65 billion in the same period last year.

Timah produced 22,837 metric tons and sold 21,588 metric tons of refined tin in the first nine months. Simultaneously, its average selling price stood at $20,557 per metric ton, climbing 18.85 percent yoy.

“The increase in revenue was driven by a surging demand for tin used for electronic goods, including from China,” Timah said in a statement.

Publicly listed miner PT Merdeka Copper Gold recorded $58.9 million in revenue as of September, after it began mining activities at the Tujuh Bukit gold and copper mine in Banyuwangi, East Java, last December. Merdeka started selling its gold in May.

By the end of the third quarter, Merdeka produced 53,230 ounces of gold and 15,683 ounces of silver. Its combined gold and silver sales stood at 50,473 ounces, which led to a net profit of $18.49 million, reversing a net loss of $2.5 million in the same period last year.